Cruise says hostility toward regulators has led to the grounding of its autonomous cars

Cruise, the self-driving car subsidiary of General Motors, said in a report Thursday that a hostile approach by top executives toward regulators had led to a cascade of events that ended with a nationwide suspension of Cruise's fleet.

The roughly 100-page report was compiled by a law firm that Cruise hired to investigate whether his executives misled California regulators about an October accident in San Francisco in which a cruise vehicle dragged a woman for 20 feet. The investigation found that while the executives had not deliberately misled state officials, they had failed to explain key details about the incident.

During meetings with regulators, executives let a video of the crash “speak for itself” rather than fully explaining how one of the vehicles seriously injured the pedestrian. Executives later focused on protecting Cruise's reputation rather than providing a full account of the accident to the public and media, said the report, which was written by the law firm Quinn Emanuel Urquhart & Sullivan.

The company said the Justice Department and the Securities and Exchange Commission were investigating the incident, as were government agencies and the National Highway Traffic Safety Administration.

The report is central to Cruise's efforts to regain public trust and ultimately restart operations. Cruise has been largely shut down since October, when the California Department of Motor Vehicles suspended its operating license because the vehicles were unsafe. It responded by taking its self-driving cars off the roads nationwide, laying off a quarter of its staff and replacing Kyle Vogt, its co-founder and CEO, who resigned in November, with new leaders.

Cruise did not mention Mr. Vogt in a blog post summarizing the law firm's review. Mr Vogt declined to comment.

The summary of the report was a long list of reasons to explain why regulators accused Cruise of misleading them. The law firm discovered that an engineer who provided video of the crash to regulators had a poor internet connection that prevented the regulators from seeing a full and clear version of the video. Some senior Cruise leaders also did not know the details of the incident before meeting with state officials.

Last month, Cruise fired nine people, including most who had met with the DMV. The vice president of communications later left. It eliminated about 900 of its 3,800 positions, mainly business and commercial functions that were less important after operations were suspended.

Cruise hopes the investigation will help restore its reputation and pave the way for the restart of its self-driving business. The company believes the problem was the result of a leadership team that made rapidly expanding a business a priority over the safety of operations.

Cruise provides the report to the DMV and the California Public Utilities Commission, which approves self-driving car programs in the state. It said it would also make it available to the public.

The report will be closely studied by anyone interested in the future of self-driving cars. Cruise's problems have raised concerns among the technology and car companies that have poured billions into developing the technology. It also reinforced safety concerns from regulators and people concerned about the risks posed by robots taking to the road.

In Cruise's absence, Waymo, founded by Google, has become the only self-driving car company offering taxi rides in San Francisco. Although Waymo's fleet of about 250 cars has seen few major incidents, the city of San Francisco last month sued the state of California for allowing Waymo and Cruise vehicles to operate without stricter regulations.

“We know that our license to operate must be earned and ultimately granted by regulators and the communities we serve,” Cruise said in a blog post. “We are focused on advancing our technology and regaining public trust.”

Cruise is the latest tech company to hire a law firm to review its operations. Uber has hired former Attorney General Eric H. Holder to investigate issues of sexual harassment and wrongdoing under co-founder Travis Kalanick

Cruise's response to the Oct. 2 crash fueled regulators' concerns about the crash itself. Another car struck the woman at an intersection in San Francisco, throwing her into the path of one of Cruise's vehicles. The Cruise car stopped and then drove forward twenty feet, dragging the woman as it drove to the curb.

The report stated that while the Cruise leadership team and staff did not attempt to deceive or mislead regulators during key meetings with a variety of government officials the day after the incident, they did not explain that there was a technical problem that caused the car to crash. had a pedestrian dragged after she was hit.

Instead of sharing with the DMV a full video taken by the Cruise vehicle of the crash, state officials said, Cruise shared a shortened version that ended with the car stopping. Footage of the car towing the woman was edited out. The DMV said it learned of the full video from another agency.

The report commissioned by Cruise said the company had shared the video with some supervisors, but that when an employee showed the video during the Oct. 3 meetings, “transmission issues” hindered or prevented supervisors from seeing the car hit the pedestrian had carried away.

“They could have survived this if they had been honest, but they took a different approach and ultimately destroyed their reputation,” said Matthew Wansley, a professor at Cardozo School of Law in New York who specializes in emerging automotive technologies. “To recover, they had to have a fully transparent autopsy of what happened.”

GM, which bought Cruise for $1 billion in 2016, has stepped in to run the company. It installed its general counsel, Craig Glidden, as Cruise's president and made him responsible for overseeing the investigation and helping evaluate how the company should move forward. Mr. Glidden is trying to change the company's culture to place a greater emphasis on safety and transparency with regulators and the public.

Among the changes the company plans to make is overhauling the way it calculates the safety of its vehicles, a person with knowledge of the report said. Previously, Cruise focused on racking up as many miles as possible without incident so it could demonstrate that its self-driving cars are safer than cars driven by humans. The company is in the process of defining a new approach.

Even before the Oct. 2 accident, Cruise's cars made headlines on other topics, including a collision with a fire truck and an incident in which one of the cars hit wet concrete and became stuck.